Global fiscal (and monetary) policy is not now constructive nor growth enhancing, nor is it likely to be. If that be the case, then equity market capital gains and future returns are likely to be limited if not downward sloping. High quality global bond markets offer little reward relative to durational risk. Private equity and hedge related returns cannot long prosper if global growth remains anemic. Cash or better yet "near cash" such as 1-2 year corporate bonds are my best idea of appropriate risks/reward investments. The reward is not much, but as Will Rogers once said during the Great Depression - "I'm not so much concerned about the return on my money as the return of my money."

The problem, however, is that merely getting your money back with no return will not pay for retirement or college.

And so basically, as Gross sees it, we're screwed.

Gross again:

That is the near global conundrum we are faced with as near zero percent interest rates limit capital gains in the future, and if raised too high, will lead to redzone losses. Not much else to say here. Finance based capitalism with its zero bound interest rates has now produced global imbalances that impair productive growth and with it the chances for "old normal" prosperity.

In other words, this incredibly low interest rate environment has created major distortions in the economy and the financial markets, and now we're paying for it.

There are few new themes in here for regular Gross readers, as this is an idea Gross has been hammering home for some time.

But then again, Gross is still hammering this theme: The world is facing a "new normal" in which everything — interest rates and investment returns — will remain lower for longer.